3 Reasons to Get a Free FICO Score

Those who know their consumers rights can achieve the most success in their financial lives. Under the law, you have the right to a free Fair Isaacs Company (FICO) credit report. Here are 3 reasons to get a free FICO Score.

Fair Credit Reporting Act
Your FICO credit score is used by an estimated 90% of financial lenders. It is also used by insurance firms, apartment complexes and employment offices to gain a better understanding of who you are. The credit score is supposed to represent your creditworthiness.

In 1971, the Fair Credit Reporting Act (FCRA) was passed granting you one free credit report each year. You have the right to a credit report free of errors. If you have any questions, you can contact the Federal Trade Commission (FTC), which enforces this law.

There are three different credit bureaus responsible for credit scores: Equifax, Experian and TransUnion. Each has its own standards and rules for credit reports. When you seek out your free FICO credit score, make sure you request one from each credit rating bureau.

1. Searching for Errors
One of the worst feelings in life is going to a store, giving them your credit card and having it denied. The merchant is not always given the reason for the rejection immediately. His monthly credit card report will provide more details on each transaction.

Of course, after this troubling experience, you might want to check your credit report for errors. If you are sure that you have plenty of cash in your banking accounts, then the problem might be with your credit report. You have the right to a clean, up-to-date, accurate credit score under the law.

There might be an individual with the same name as yours. Data entry might have simply transferred his data onto your records. You have the right to remove this faulty information from your credit files.

If you do find an error on your credit report, then you should write a professional letter to the credit reporting agencies. Collect all of your financial documents and receipts together; prove why the records are faulty. Your written letter is a legal document testifying to the fact that you found an error.

2. Negative Items Should Fall Off Over Time
Financial penalties are meant to be short-term concerns allowing you to revamp your long-term financial well-being. Minor negative items, such as non-sufficient fund fees (NSF) and late payments are supposed to fall off your credit report after seven years. More serious problems, such as a bankruptcies or court judgments, will take longer.

When you believe that you have reached the date when something should fall off your credit report, then check to ensure it is actually removed. Mistakes can occur by accident. Don’t suffer because you failed to check; be proactive in managing your credit rating.

Once these negative items fall off your credit report, your score should increase. With a higher credit rating, you can qualify for more loans and receive lower interest rates. This will save you money in the long run.

3. Debt Consolidation
If you are struggling to repay all of your loans, then debt consolidation may be the answer. You can combine multiple loans with multiple interest rates and repayment schedules into one easy-to-remember consolidated loan.

Request a free FICO score to help you determine how to consolidate your debt. You can decide which loans you want to consolidate; you don’t need to choose all of your loans. You might even want to retire some of your debt using a consolidated debt loan. Debt consolidation can help you regain control of your life.